The 6th China FMCG Channel Innovation Conference, hosted by New Distribution, a professional FMCG new media platform, was held from April 1 to 3 at the Chengdu Ascott Hotel. The event attracted 3,000 industry professionals, including distributors, community e-commerce platforms, brand owners, and internet companies, from all over the country, with a full house and unprecedented scale.
On the afternoon of April 2, at the parallel forum on China's new consumer brand channel growth summit, Xu Pin, National Sales General Manager of Wuhan Hengrunshi, delivered a keynote speech on 'Exploring New Trends in Youth-Oriented Products'.
As a representative of new consumer brands innovating for youth, Hankou No.2 Factory has gained a broad consumer base and won the favor of young people under the new consumption trend. Let's hear how they understand youth-oriented products.
New Distribution has carefully compiled and excerpted the essence of Xu Pin's speech at the conference, and now publishes it for the benefit of New Distribution readers.
First, let me share some data. In the past 2020, China and the world were severely affected by the pandemic, but despite this, in the past year, about 2,000 brands emerged in the consumer goods industry, with over 300 receiving investment. Moreover, more than 300 brands achieved sales exceeding 100 million yuan.
These figures undoubtedly represent a new trend in China's consumer goods industry in 2020, leading to the birth of many companies in sub-categories and sub-fields.
But when new industries and categories are born, who is carrying the growth of these consumer brands? Another data point shows that in 2020, there were 320 million new consumers from the post-95s, post-00s, and Gen Z. At the same time, with the improvement of the overall economic level of the Chinese people, a large number of new middle class emerged, about 430 million. The small-town youth group also has about 300 million people. The birth of these consumer groups is actually due to China's rapid urbanization.
In fact, these three groups overlap a lot, but we can also see that each sub-group has a dividend of several hundred million people. For the consumer goods industry, if we can capture any one of these sub-groups, we will have captured this wave of demographic dividend.
The three groups have different characteristics. For example, for the post-90s and post-00s, including Gen Z, I once saw a commentator say that the most patriotic people in China are not the post-60s, post-70s, or post-80s, but actually the post-90s and post-00s, because from birth to adulthood, they have grown up drinking Chinese beverages and eating Chinese food, so they are more patriotic. They are also known as the richest generation, with a unique sense of self.
The new middle class in China has over 400 million people, and this group spends about 5,000 yuan per month on personal consumption. Compared to their parents, they have higher demands for their own consumption and hope to improve the quality of their consumption.
As for small-town youth, in the past, people thought their spending power was low, but now, due to changes in material and economic foundations, their needs may have risen to another level. So they hope to have social and entertainment expenditures, and with more free time, they have more ideas about their own consumption.
The so-called new scenarios are actually changing with the changes in consumer groups and product categories. In the future, product categories will become more and more segmented. Previously, we drank water to meet physiological needs, just to quench thirst. Now, many different needs have emerged, such as drinking functional beverages for energy replenishment; or during afternoon tea, I need a drink that pairs with desserts; what to eat and drink during leisure and entertainment, or even when playing games online all night or working overtime, what drinks do I need, etc.
Some FMCG products have transformed from optional roles to companions accompanying us throughout the day.
New consumption demands, new consumer groups, and new industries are constantly emerging. The direction of new products has become one that satisfies both rational and emotional needs, and the two will go hand in hand. First, the appearance must please me, the taste must reflect me, and the expression must also reflect me. A good product now is equivalent to a good social currency, allowing you to make better friends and have more common topics, not just a beverage or food.
In response to the current changes in consumer groups, consumption scenarios, and the upgrading of consumer brands, Hankou No.2 Factory, as a beverage trend brand with a national trend background, has also undergone a comprehensive upgrade of the entire brand. This year, our brand upgrade hopes to persist for 100 years. We hope our products not only meet visual, taste, and texture requirements but also bring more fun, playing with these products in different ways.
To this end, we have made preparations in two aspects.
First, in terms of products, actively seek fun.
Second, in terms of channels, also actively seek fun.
First, as you can see (below), these are the products we will launch in April this year and those already launched. On the left are glass bottles; we will launch many versions, including topic editions, classic editions, city editions, and co-branded editions, with limited bottles combined with your city.
At the same time, on the right, there are various products matched according to your personal emotional expression.
For example, the daring and playful Hei Dong series hopes that when consumers buy this product, they will complain to us, saying, 'Why can't I drink this beverage?' In fact, when this product is first opened, it is a jelly and cannot be drunk, but after vigorous shaking, it transforms from a large piece of jelly into a soda containing jelly particles, with both the taste of soda and a bit of jelly, adding fun. In KKV, Miniso, and RT-Mart, this product sells very well.
In addition, we have launched the Ha Shui series for young people who shout about losing weight while eating hot pot, helping to supplement hyaluronic acid to satisfy their desire for beauty; we also launched a sugar-controlled milk tea; and Yang Mei Tu Qi tea, which combines bayberry juice, soda, and fermented tea, with 7 different packaging designs and hidden editions.
We continue to promote product research and innovation, basically ensuring that we launch a new product, flavor, or packaging to the market every month.
Hankou No.2 Factory 2021 New Product Family Photo
This is the family photo of 2021 new products, and this is only one-fifth of them. The remaining products will be launched to the market gradually this year by season, city, and channel.
In addition to product innovation, we are also working hard to find channels. In the past, we gave more money to traffic, hoping to drive business development online. But in reality, in China, although offline channels are slowly declining, they are still the largest channel in terms of volume. Some convenience store managers also hope that we can feed some traffic back to offline, bringing some traffic to their stores.
So, we do online seeding, brand placement, and live streaming, but we also distribute this traffic by region and channel, bringing it to offline channel customers, while letting offline channels carry this traffic for conversion, combined with private domain marketing, cyclically bringing heat to the channels.
In 2020-2021, we did a lot of online seeding work, such as on Xiaohongshu, Weibo, and Douyin. We participated in and organized many activities, including internet celebrity endorsements. In 2020, targeting the consumer group, we did about 200 roadshows, as well as music festivals and art exhibitions. We will continue this style, pulling in scenarios that connect with young people and shaping consumer demand.
This is the current channel layout of Hankou No.2 Factory in China, with about 100,000 stores. At the same time, we are actively expanding overseas business. In the United States, Canada, and Singapore, wherever there are Chinese people, there is basically export trade.
So, we hope that through this year's brand upgrade and the new standard configuration of products, we can serve new channels and serve the entire omni-channel.
Once the tip is adopted, a reward of 400-2000 yuan will be paid.